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>> the hole the recession left was huge, and progress has been painfully slow. millions of americans are still looking for work. >> tom: he defended his push for an extension of middle class tax cuts, and said extending tax cuts for the wealthy just doesn't make sense. you're watching "nightly business report" for friday, september 10. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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this program is made possible by contributions to your pbs station from viewers like you. this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening, everyone. "painfully slow." tom, those are the two words president obama used today to describe the pace of growth in the u.s. economy. and the economy was a big topic at his white house news conference this morning. >> tom: the other big topic, susie, was the president's announcement of his new top
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economic advisor. he's austan goolsbee. goolsbee has been on the president's economic team. he now becomes chairman of the white house council of economic advisors, replacing christina romer, who left to return to teaching. >> susie: the president used today's press briefing to push his agenda for reviving the economy, from tax breaks to a small business jobs bill. washington bureau chief darren gersh reports. >> reporter: the president today acknowledged what many americans know too well-- economic progress has been painfully slow. still, he urged voters to stay the course this on election day. >> if it was just a referendum on whether we have made the progress we need to, then people around the country will say that we are not there yet. if the election is about the policies that are going to move us forward, versus the policies that will get us back into a mess, then i think democrats will do very well. >> reporter: business groups say administration policies are
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adding to the economic mess. u.s. chamber of commerce chief economist martin regalia points to health care, financial regulation, and tax policy-- areas where he says the obama administration is increasing cost and uncertainty. >> the bottom line is you get subpar growth. 3% growth over the first year of the recovery is extraordinarily slow when compared to prior economic downturns. >> reporter: but this downturn is different, the president says. he reminded the country today that four million jobs were lost before he took office, and another four million since then. and to help those who are struggling, the president again called on republicans to join him in extending the bush tax cuts for the middle class. >> that's something we can all agree to. why hold it up? why hold the middle class hostage? >> reporter: but the president is not prepared to extend tax breaks for families making more than $250,000, a policy business groups argue will mean higher costs for many business owners. >> in an economic downturn, you don't want to sap the spendable
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income that can lead to demand, that can drive consumption that can help create jobs. at one point, the president seemed to signal a potential compromise, saying there was room for discussion on taxes, but white house aides quickly said the president is not ready to cut a deal. darren gersh, "nightly business report," washington. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks end the week on an up note. the dow rose 47, the nasdaq added six, the s&p 500 gained five. trading volume fell to its lowest levels this week on both the big board and the nasdaq. b.p. is getting the boot from an index following ethical companies. the f.t.s.e. 4good ethical investment index says it's dropping the oil giant because of the gulf oil spill. a gas-line explosion in the san francisco suburbs has left at least four people dead. it also demolished 38 homes and blew a giant crater in the
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ground. california utility pacific gas and electric said a gas- transmission line ruptured at the blast site. shares of parent company pg&e were among wall street's most active. we'll see them in tonight's "market focus." >> susie: tomorrow is september 11, the nine-year anniversary of the terrorist attacks in new york, pennsylvania and washington. redevelopment of the world trade center site and surrounding infrastructure in lower manhattan has been slow. but, leasing activity is picking up in the area, and the district has recovered fairly quickly. suzanne pratt takes a look at where things stand today. >> reporter: a quick look at the area surrounding the world trade center site tells a lot about what's been happening in lower manhattan. sure, the big news is that one world trade-- also known as the freedom tower-- is finally under construction. but, from whole foods to bed bath and beyond, new york's famed financial district has gone residential. it now ranks as one of the fastest growing neighborhoods in the city.
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before the tragic events of 9- 11, 24,000 people lived in lower manhattan. today, that number has more than doubled. downtown alliance president and longtime area resident elizabeth berger says it's simply a great place to live. >> i think people like the architecture, they like the views. this is one of the few places in new york where you know that manhattan is an island, and where you see what new york used to look like. >> reporter: additionally, many big businesses have opted to stay in lower manhattan, while others are venturing into the area for the first time. yes, financial services and are still a large component, but the economy is diversifying. the big question is whether lower manhattan can absorb all of the new office space that will come onto the market once the world trade center buildings are completed in the next few years. ric clark, c.e.o. of brookfield properties, one of manhattan's biggest landlords and owner of the world financial center opposite the trade center, says that shouldn't be a problem.
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he points out downtown's vacancy rate is currently 9.5%-- better than midtown's. >> we're seeing not only leasing demand from downtown historical tenants-- the financial firms, the insurance firms and the government agencies. but, also the media, the publishing, and the other historic midtown tenants are looking at downtown. >> reporter: magazine giant conde nast is more than just looking. it recently signed a letter of intent to lease nearly 40% of 1 world trade. 4 new york plaza on water street will soon be occupied by the "daily news" and "u.s. news and financial incentives and lower rents are a big part of the attraction. but two new state-of-the-art transit centers presently under contruction are also part of the draw. they will connect subway, train, bus and ferry lines in lower manhattan. in addition, redevelopment plans for the area focus on improving
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quality of life for workers. >> we want them to be able to go out at lunch and walk through a park. i think about 15% of the acreage in lower manhattan is dedicated to open space and parkland. >> i think it's really a living monument to what happened on 9- 11 that lower manhattan has come back stronger, bigger and ready for the 21st century. suzanne pratt, "nightly business report," new york.
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>> tom: the major indices have put in two straight weeks of higher closes, but this week, the move was more modest. let's get to tonight's "market focus." the markets close at their highest levels in almost a month. the dow industrials eked out a 0.1% gain. the nasdaq was higher for 0.4%, remember the market was closed for labor day on monday. and the s&p added about a 0.5% since last friday. september's reputation as the worst month for stock investors isn't holding true so far. all 10 of the major stock sectors are higher this month. industrial stocks have led the way, as some economic concerns have moderated. financial stocks also have jumped, and the market has confidence in the consumer, with discretionary stocks up almost 7% since the start of the month.
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pg&e continues investigating the deadly nat gas pipeline explosion near san francisco. as regulators join the investigation, the stock saw more than ten times normal volume. on this 30-day chart, you can see today's fall of 8%, down to a one-month low. on a bigger three-year chart, shares were close matching their 2007 high just yesterday, before this drop. nokia shares were very active, with a management shake-up ahead of a big product launch. for the first time, a finn will not be the top boss at nokia. stephen elop takes over as c.e.o. later this month. he was the head of microsoft's biggest division by sales, its business software unit. he takes over a company that sells more mobile phones than anyone else. in the second quarter, nokia's name was on more than one out of every three mobile phones. but, critics say, it is behind in the smartphone market. it is expected to answer critics next week with its n8
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smartphone. it will be unveiled in london. one question is whether or not any u.s. carriers have signed on. shares were up 2% on three times its usual volume. the big drop in april came when nokia cut its profit outlook. the trio nokia is competing with for phone software is google, research in motion and apple. tech consultant firm gartner thinks google's android phone software will be the second biggest by the end of this year. nokia remains the biggest. this threesome made fractional moves today. and, the f.d.a. o.k. for a return to the market of a potassium drug provided for some big moves for its maker, k.v. pharmaceutical, and its competitor watson. k.v. rocketed up 74%. the fed gave its potassium medicine the green light after passing facility inspections. watson fell 4% as a competitor returns to the market. and that's tonight's "market focus."
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>> susie: as we continue our series "budget blues," looking at the money struggles facing state and local governments, we turn to virginia. the state's governor is looking for new revenues from a product as old as the hills: alcohol. stephanie dhue looks at whether the governor's plan to privatize liquor sales will be a budget win or a hangover in the making. >> reporter: in town hall meetings around the state, governor robert mcdonnell is making the case for getting virginia out of the liquor business. >> i don't necessarily think it's a core function of
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government to have to distribute gray goose or jack daniel's, i think there's other things that are probably more important. >> reporter: the governor proposes auctioning 1,000 liquor licenses to retailers, like costco, giant, and 7-11, which already sell beer and wine in virginia. the state would also auction wholesale licenses and get rid of its warehouse and state-owned stores. the proposal promises to bring in nearly $0.5 billion to help fund transportation projects. >> letting the free market work, we can generate a one-time windfall for transportation and keep an equivalent amount of money coming to the state, it's just smart business. i'm looking for ways not to dump more taxes on the citizens, but to find other creative ways to raise money for roads. >> reporter: to do that, the governor has to get virginia's general assembly to agree. and many aren't so sure it's a good deal for the state. virginia takes in $260 million each year from liquor sales. to make up for lost revenues, the governor's plan would tax restaurants and bars that buy liquor directly from wholesalers instead of retailers. david englin is vice chairman of
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virginia's house democratic caucus. he says changing the system now is risky. >> at a time when the state can't even afford to mow the medians on the state highways, we can't afford to risk losing hundreds of millions of dollars in perpetuity in state revenue for some up-front gain, which may or may not materialize to the extent the government proposes. >> reporter: virginia's not alone looking to exit the liquor biz, several of the 18 states that still control sales are considering similar moves to close budget gaps. garret peck studied liquor control for his book, "the prohibition hangover." he says privatizing state stores hasn't been a budget bonanza. >> a couple of states have moved over-- at least they have franchised their state control. iowa did that, maine did that, and what they've generally seen is that the state ends up with less revenue, ultimately.
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they have outsourced it to an agency or firm that sells alcohol, and most of the states have seen a revenue loss from that. >> reporter: while several states are considering privatizing liquor sales to raise money, none have put the political capital behind it like virginia's governor mcdonnell. he says its as much a philosophical issue as a financial one. stephanie dhue, "nightly business report," arlington, virginia. >> susie: a little later in the program, we head to the heartland to wrap up our series "budget blues." we look at what red ink is doing to the old fashioned county fair. >> tom: here's what we're watching for next week: our friday "market monitor" guest is elaine garzarelli, president of garzarelli capital. we'll also see the august reports on retail sales, producer prices and consumer prices. monday, how when you grew up, and your life experiences, can shape your investment decisions, as we continue our series "your mind and your money." >> susie: the obama administration has a new pay czar. patricia geoghegan will replace kenneth feinberg-- he stepped
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down today. she's now responsible for setting pay guidelines at bailed out firms-- a.i.g., general motors and chrysler. geoghegan is a treasury department lawyer. she previously specialized in tax law and executive compensation in private practice. shut down a major oil pipeline near chicago. the 6a line remains shut after leaking oil. that is limiting the company's imports from canada. the pipeline is a primary supplier of crude oil from western united states into the canada. they expect "significant impact" on oil producers and refiners. it rose 3% to $76.45 a barrel in new york trading.
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>> tom: politics can make investors nervous, but not tonight's "market monitor." robert drach is the publisher of the "drach weekly research report." and he's is back with here on "nightly business report." >> good to see you, tom. >> tom: ahead of the november elections, you say you're absolutely bullish about stocks. why is that? >> if there was any time you didn't have to worry about the market than elections, this is it. historically, if the legislative and executive
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branches offset, which looks like is going to happen. >> tom: different parties. >> yeah. they offset, it is invariably strong for stocks. one group with a lot of the political cronyism, and special if you have another things. >> tom: like what? >> the most accommodated fed in history, and the cash reserves are the largest in history. >> tom: in terms of the corporate cash -- >> right. you can measure it by raw amount. you can measure it asperse tage assets. it is historic. you have three historic things: the fed, the elections, and the man. >> tom: does all of that fuel future inflation? >> absolutely. >> tom: and if so, you want to be in stocks? >> you want to own the productive assets, no matter what, but you don't know what the inflammation rate is or how it is going to go about, or the pace. but you have to have it. you never have not had it because you created so
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much new money. >> tom: we saw the federal reserve balance sheet expand over the last two years. >> and they're not going to change. >> tom: let's look at some of the ideas you brought along with you in this new environment of possibly political gridlock. 146% verses the s&p return. >> we put that, other than in the "nightly business report," it is mostly educational to stay ahead of of the s&p. stay out of trouble. >> tom: there are new picks you like to stay out of trouble are in health care, including johnson & johnson. why do you like it? >> one of the things we tried to impress is to stay with quality issues that are depressed. and this model has won about 90% of the time, but it is not very spectacular. but that is not the point. the point is to educate, to stay in this type of low price, relative high quality stock and they rotate them.
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medtrotics, the same thing. you want to stay a plus in wa you don't like. >> tom: what makes you think these are high quality names. >> you can go to the basic history of the earthquake projections. earnings projections. but they rotate, and when they're out of favor, they go back in favor. you get far more refined than that, but you want to start at the basics and then move on from there. and the thing is not to lose. and you want to expand from there. >> tom: that's right. the key is not to lose money. but putting money at risk in this market, even back in july -- >> i've done this stuff for about 40 years, and i have never seen the data stronger -- >> tom: even today, even with the weaker economic numbers we've seen? >> the money will pull the economy. you're up about 60% from march of last year. that's no accident. that's the raw force of the money. >> tom: but we're down a
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good 20% or so since april. >> yeah, but that's okay, too. bu you go in a sequence. a sharp advance, and then chop, chop, chop, and then you get the next one. there is nothing in any data that would make me scwirmish here. >> any position in the stocks we mentioned? >> no, these are basically for the website. >> tom: bob, we appreciate the in sights. >> susie: and finally tonight, as we wrap up our week-long look at the tough economic times facing state and local governments, we take you to the land of lincoln for a look at a budget crisis that would shame honest abe. illinois' $13 billion budget shortfall is second only to california's in size. libraries are closing, teachers are being laid off and services are getting cut. and as diane eastabrook reports, a summer staple for many rural communities is also on the
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ropes. >> reporter: in the midwest, county fairs are a part of the culture. but in illinois, fairs like this one in kankakee county could disappear from the landscape. the state is wrestling with a $13 billion deficit. so, in the current budget year-- which started july 1-- illinois cut by a third the premiums, or the money it pays county fairs for prizes. that put kankakee county in a bind. plans for its august event had been set for months. so, fair president pete schafer faced a big budget hole and little time to fill it. >> you raise your entry fees and lose out on some of the people because they feel the entry fees are too high. you lower your premiums, you lose your entries that way. or, you just eat it and try to make it up some place else. >> reporter: the money illinois provides county fairs has been dwindling over the past few
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years. but this year, the cuts went deeper and reached beyond the fairgrounds. >> 4h is a huge part of rural life and county fairs like this one. and it, too, is suffering under the huge strain of illinois' budget deficit. about 300 kankakee county kids are involved in 4h, like 12- year-old dalton lemenager and his 15-year-old sister gabrielle, who raise and show livestock. >> through 4h, i've found what i'm gonna do for my career. i'm going to major in ag business degree. >> reporter: this year, kankakee county's 4h program could get downsized. the office that runs the program saw its state funding cut by nearly half. so, director beth laplante had to let half of her staff go. >> 4h will continue, i'm not saying that. but, we won't have the professional staff that we've had in the past to train volunteers to work with kids. >> reporter: kankakee county is now trying to raise additional funds to pay for this fair, as
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it makes plans for the next one. schafer thinks renting out the fairgrounds for other events could help fill the financial void left by the state. still, he can't be certain this summer tradition can continue as it has. do you see a time when you might not be able to have a county fair? >> hopefully not in my lifetime. with the added expense who knows what's going to happen. >> reporter: diane eastabrook, "nightly business report," kankakee, illinois. having grown up in iowa. >> tom: lots of them, lots of summertime spent with the tilt-a-wirl and a corndog. that is "nightly business report" on this friday evening, september 10th. i'm tom hudson. have a great weekend, and you, too, susie. >> susie: you, too, tom. have a wonderful weekend, everyone, and we hope to see you right here again on monday.
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[gloomy music] ♪

Nightly Business Report
WETA September 11, 2010 1:00am-1:30am EDT

News/Business. (2010) Robert Drach, Drach Weekly Research Report; budget blues. New. (CC) (Stereo)

TOPIC FREQUENCY Manhattan 10, Virginia 9, Nokia 6, Illinois 6, Kankakee 5, New York 4, S&p 3, Washington 3, U.s. 3, Tom Hudson 2, Darren Gersh 2, Obama Administration 2, Diane Eastabrook 2, Watson 2, Suzanne Pratt 2, Iowa 2, Canada 2, San Francisco 2, Elaine Garzarelli 1, Kenneth Feinberg 1
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